New regulations related to newsprint

28/04/2012

By means of Law No 26,736 issued on December 22, 2011 and published in the Official Gazette in December 28, 2011, the Congress of Argentina declares of public interest the manufacturing, marketing and distribution of cellulose pulp and paper for newspapers (“newsprint”).

The new regulation creates the Bicameral Manufacturing, Marketing and Distribution of Newsprint Monitoring Commission, which is of permanent character and is composed of eight (8) senators and eight (8) representatives. Its main objective is to ensure the manufacture, marketing and distribution of cellulose pulp and newsprint for national industry. It is also responsible for the progressive implementation of the best available techniques, taking into account the employment factor and applying the practices that guarantee the preservation and protection of the environment.

The Economy and Finance Ministry is declared enforcement authority and must receive assistance and assessment from the Federal Advisory Commission for the Promotion of Production and Sustainable Use of Cellulose Pulp and Newsprint. This commission will have as duties, among others, (i) analyze the situation and development of international and local newsprint market, (ii) analyze the commercial conditions and access to the product in the local market, (iii) propose measures tending to broaden the diversity, democratization and federalization of written press and, (iv) advise the national government regarding the whole issue of newsprint.

It is stipulated that manufacturers, distributors and traders of cellulose pulp and newsprint should make known to the purchasing companies and the Bicameral Manufacturing, Marketing and Distribution of Newsprint Monitoring Commission the following: the total and available stock; the maximum production capacity and estimated production for the next three (3) months; the unique selling price of newsprint, which will be applied to any transaction involving the purchase of more than one (1) ton of product.

On the other hand, the rule also states which behaviors of members of the manufacturing, distribution and marketing of cellulose pulp and newsprint chain are subject to penalties. Activities considered in violation of the regulation include, among others: the refusal or obstruction to be inspected and the lack of cooperation with the inspection, when required; the use of cellulose pulp and newsprint under different conditions from those authorized; the breach of the resolutions adopted by the enforcement authority; and the alteration, manipulation or fraudulent substitution of the cellulose pulp and newsprint’s characteristics.

Breaches of the Law No 26,736 will be penalized by the enforcement authority with warnings; fines; disqualifications; suspensions; repair of damages; closures and confiscations. Whether to value the amount of fines or to set terms for disqualifications and suspensions, the Ministry of Economy and Finance will take into account the seriousness of the violation, the repetition of the acts, the damage caused, the offender’s attitude after the breach, the economic and financial conditions of the person who breaks the law and other specifics of the case.

Finally, the regulation creates the supervision tax, which is obligatory for manufacturers, marketers and distributors of cellulose pulp and newsprint. The collection is assigned to the enforcement authority and it is stated that what is produced will be used for the operation of the Federal Advisory Commission, while what exceeds will be led to the fiduciary fund. The latter is created to encourage investment in capital assets of small and medium enterprises engaged in activities related to manufacturing, marketing and distribution of cellulose pulp and newsprint.